LONDON, June 20 (Reuters) - Britain’s Berkeley warned on Wednesday of a 30 percent fall in pre-tax profit this year after the London-focused housebuilder delivered a better-than-expected “peak” performance in 2017/18.
While the predicted fall was in line with what analysts had been expecting, the confirmation by Berkeley knocked its shares, which were trading down 3.7 percent at 0743 GMT.
Berkeley said its average selling price rose 6 percent to 715,000 pounds, helped by properties in prime central London locations and its pretax profit for the year to April 30 rose 15.1 percent to 935 million pounds ($1.23 billion).
But Chief Executive Rob Perrins told Reuters that fewer such high-margin sales would come through in 2018/19 as housebuilders had cut back on buying such sites in late 2013 and 2014 as land prices rose and the commercial market improved.
Berkeley, which mainly builds at the top end of the London market, constructed 3,536 homes in the year, down 9 percent.
“The large sites in London have ended ... It’s just the cycle that it’s in ...but it will pick up again,” Perrins said, adding that other factors such as a rise in stamp duty property tax were also dampening the London market.
Berkeley also cautioned over the impact of Britain’s departure from the European Union, which has made some buyers reluctant to buy in London’s once red-hot market.
$1 = 0.7596 pounds Reporting by Costas Pitas; editing by Paul Sandle and Alexander Smith